Your Essential Guide To The QRMP Scheme For Quarterly Returns And Monthly Payments

1. Overview of QRMP Scheme

Definition and Purpose

The Quarterly Return Filing and Monthly Payment (QRMP) scheme is an initiative by the Central Board of Indirect Taxes & Customs (CBIC) under the Goods and Services Tax (GST) framework. It is designed to simplify the filing process for small taxpayers by allowing them to file GSTR-3B returns quarterly while making tax payments monthly. This scheme aims to reduce the compliance burden and improve cash flow management for eligible taxpayers.

Eligibility Criteria

Taxpayers with an aggregate annual turnover of up to ₹5 crore in the current and preceding financial year are eligible for the QRMP scheme. This includes taxpayers who have already filed their last due Form GSTR-3B return. It's important to note that the scheme is not available to every taxpayer; specific categories, such as taxpayers who have opted out of the composition scheme or those applying for fresh registration as normal taxpayers, can avail of this scheme.

2. Opting for the QRMP Scheme

How to Opt-In or Out

Taxpayers can opt for the QRMP scheme via the GST portal. The option to opt in or out is available from the first day of the second month of the preceding quarter to the last day of the first month of the quarter for which the option is being exercised. For instance, to opt for QRMP for the April-June quarter, taxpayers must make their selection between February 1st and April 30th.

Timeline for Opting In/Out

The choice made by the taxpayer will be applicable for the entire financial year unless they decide to opt out. If a taxpayer becomes ineligible (e.g., if their turnover exceeds ₹5 crore during a quarter), they must revert to monthly filing from the next quarter.

3. Invoice Furnishing Facility (IFF)

Purpose and Functionality

The IFF allows taxpayers under the QRMP scheme to upload their B2B invoice details monthly for the first two months of the quarter. This facility aims to facilitate the faster availability of input tax credit (ITC) to their recipients.

Utilization Guidelines

• Usage Period: Only for the first two months of the quarter.
• Invoice Limit: The total value of invoices that can be uploaded is capped at ₹50 lakh per month.
• Exclusivity: Invoices uploaded via IFF need not be reported again in the quarterly GSTR-1.

4. Tax Payment Methods under QRMP

Fixed Sum Method (FSM)

Under FSM, also known as the 35% Challan method, taxpayers can pay an amount equal to 35% of the tax paid in cash in the previous quarter's GSTR-3B (if quarterly filers) or 100% of the tax paid in the last month of the previous quarter (if monthly filers).

Self-Assessment Method (SAM)

Taxpayers estimate their tax liability for the month by considering the tax liability on inward and outward supplies and the available ITC. The tax must be paid by the 25th of the following month.

5. Filing and Payment Deadlines

6. Interest and Late Fees

Interest Calculation

Interest is applicable if the tax paid via FSM is less than the actual liability, or if SAM payments are delayed. The rate is 18% per annum calculated from the due date of payment until the date of actual payment.

Late Fee Charges

A late fee is applicable for delayed filing of GSTR-3B, capped at ₹5,000. No late fee is charged for delay in monthly tax payments under PMT-06.

7. Advantages and Challenges

Benefits for Taxpayers

• Reduced compliance burden with quarterly filing.
• Improved cash flow management with monthly tax payments.
• Early availability of ITC to recipients through the IFF.

Potential Challenges and Solutions

• Keeping track of monthly payments and quarterly filings can be complex.
• Reconciling IFF uploads with quarterly returns requires diligence.
• Solutions include leveraging GST software for compliance and staying updated on GST portal notifications for any changes or updates in the scheme.

Streamlining GST Compliance: Embracing the QRMP Scheme

Final Thoughts on QRMP

The QRMP scheme represents a significant step towards simplifying GST compliance for small and medium-sized enterprises (SMEs) and other eligible taxpayers. By reducing the frequency of return filings and allowing for monthly tax payments, the scheme offers a balanced approach to managing GST obligations without compromising on cash flow management or the availability of input tax credit.

Actionable Advice for Taxpayers

• Stay Informed: Regularly check the GST portal and official notifications for any updates or changes to the QRMP scheme, ensuring your business remains compliant with the latest regulations.
• Leverage Technology: Utilize GST-compliant software solutions that support the QRMP scheme, including features for the Invoice Furnishing Facility (IFF) and automated tax calculations. This can significantly reduce the manual effort involved in filing and payment processes.
• Maintain Accurate Records: Keep detailed and accurate records of all transactions, including invoices and receipts. This will simplify the process of filing returns and making tax payments under the scheme.
• Seek Professional Advice: Consider consulting with a GST expert or tax advisor to navigate the QRMP scheme effectively, especially if your business has complex transactions or you're unsure about the scheme's applicability to your situation.
• Evaluate Your Eligibility Regularly: Since eligibility for the QRMP scheme is based on your turnover, regularly assess whether your business still qualifies for the scheme, especially if you experience significant growth or contraction in your operations.

Conclusion: Simplifying GST for Small Taxpayers

The QRMP scheme is a testament to the GST Council's commitment to making GST compliance more manageable for small taxpayers. By offering the flexibility of quarterly filings with the discipline of monthly payments, the scheme helps businesses maintain better control over their finances while staying compliant with GST regulations.

As we move forward, it's crucial for businesses to embrace such initiatives, leveraging them to not only comply with tax laws but also to streamline their operations and focus on growth. With the right approach and tools, navigating the QRMP scheme can become an integral part of your business's success story in the GST era.